EN BANC

G.R. No. 209287 - MARIA CAROLINA P. ARAULLO, ET AL.,

Petitioners, v. BENIGNO SIMEON C. AQUINO .III, PRESIDENT OF
THE REPUBLIC OF THE PHILIPPINES, ET AL., Respondents; G.R.
No. 209135 - AUGUSTO L. SYJUCO, JR., Ph.D., Petitioner, v.
FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY
OF DEPARTMENT OF BUDGET AND' MANAGEMENT, ET AL.,
Respondents; G.R. No. 209136 - MANUELITO R. LUNA, Petitioner, v.
SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY
AS HEAD OF THE DEPARTMENT OF BUDGET AND
MANAGEMENT, ET AL., Respondents; G.R. No. 209155 - ATTY.
JOSE MALVAR VILLEGAS, JR., Petitioner, v. THE HONORABLE
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., ET AL.,
Respondents; G.R. No. 209164 - PHILIPPINE CONSTITUTION
ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN
FLROILAN M. BA CUNGAN, ET AL., Petitioners, v. DEPARTMENT
OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B.
ABAD, Respondents; G.R. No. 209260 - INTEGRATED BAR OF THE
PHILIPPINES (IBP), Petitioner, v. SECRETARY FLORENCIO B.
ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT
(DBM), Respondent; G.R. No. 209442 - GRECO ANTONIOUS BEDA
B. BELGICA, ET AL., Petitioners, v. PRESIDENT BENIGNO
SIMEON C. AQUINO III, THE SENATE.OF THE PHILIPPINES, ET
AL., Respondents; G.R. No. 209517 - CONFEDERATION FOR
UNITY,
RECOGNITION
AND
ADVANCEMENT
OF
GOVERNMENT EMPLOYEES (COURAGE), ET AL., Petitioners, v.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE
REPUBLIC OF THE PHILIPPINES, ET AL., Respondents; <;.R. No.
209569 - VOLUNTEERS AGAINST CRIME AND CORRUPTION
(VACC), REPRESENTED BY DANTE LA. JIMENEZ, Petitioner, v.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, ET AL.,
Respondents.
Promulgated:

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1,.,,V
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July 1, 2014

SEPARATE

CONCURRI~G

OPINION

PERLAS-BERNABE, J.:
I concur in the ponencia's result, but find it necessary to clarify
certain points surrounding the concepts of appropriation, realignment, and
augmentation in relation to the Disbursement Allocation Program (DAP).

Separate Concurring Opinion

G.R. Nos. 209287, et al.

This Opinion essentially stems from perceived misconceptions in the

usage of the term augmentation. The actions and/or practices taken under
the DAP should not entirely be taken as augmentations. This is because the
withdrawal of allotments and pooling of funds by the Executive
Department for realignment (in case of suspension under Section 38 infra)
and/or simple utilization for projects without sufficient funding due to fiscal
deficits (in case of stoppage under Section 38 infra) is not augmentation in
the constitutional sense of the word. The concept of augmentation pertains to
the delegated legislative authority, conferred by law (as Section 25[5],
Article VI of the 1987 Philippine Constitution [Constitution] cited below
reads), to the various heads of government to transfer appropriations
within their respective offices:
(5) No law shall be passed authorizing any transfer of
appropriations; however, the President, the President of the Senate, the
Speaker of the House of Representatives, the Chief Justice of the Supreme
Court, and the heads of Constitutional Commissions may, by law, be
authorized to augment any item in the general appropriations law for their
respective offices from savings in other items of their respective
appropriations. (Emphases supplied)

The term appropriation merely relates to the authority given by

legislature to proper officers to apply a distinctly specified sum from a
designated fund out of the treasury in a given year for a specific object or
demand against the State. In other words, it is nothing more than the
legislative authorization prescribed by the Constitution that money be
paid out of the Treasury.1 Borne from this core premise that an
appropriation is essentially a legislative concept, the process of a transfer of
appropriations should then be understood to pertain to changes in the
legislative parameters found in selected items of appropriations, whereby
the statutory value of one increases, and another decreases.
To expound, it is first essential to remember that an appropriation is
basically made up of two (2) legislative parameters, namely: (a) the amount
to be spent (or, in other words, the statutory value); and (b) the purpose for
which the amount is to be spent (or, in other words, the statutory purpose).
The word augmentation, in common parlance, means [t]he action or
process of making or becoming greater in size or amount.2 Accordingly, by
the import of this word augmentation, the process under Section 25(5)
supra would then connote changes in the selected appropriation items
statutory values, and not of its statutory purposes. As earlier stated,
augmentation would lead to the increase of the statutory value of one
appropriation item, and a decrease in another.

Gonzalez v. Raquiza, G.R. No. 29627, December 19, 1989, 180 SCRA 254, 260. See also Ponencia,
pp. 48-49.
<http://www.oxforddictionaries.com/definition/english/augmentation> (last visited June 11, 2014).

Separate Concurring Opinion

G.R. Nos. 209287, et al.

How does the increase and decrease of statutory values work in the
process of augmentation?
The query brings us to the concept of savings.
The incremental value coming from one appropriation item to
effectively and actually increase the statutory value of another appropriation
item is what Section 25(5) supra refers to as savings. The General
Appropriations Acts (GAA)3 define savings as those portions or balances of
any programmed appropriation x x x free from any obligation or
encumbrance x x x. A programmed appropriation item produces portions
or balances free from any obligation and encumbrance when the said
item becomes defunct, thereby freeing-up either totally or partially the
funds initially allotted thereto. Because an appropriation item is passed at
the beginning of the year, the reality and effect of supervening events hardly
figure into the initial budget picture. According to the GAAs,4 the following
supervening events would render an appropriation item defunct: (a)
completion or final discontinuance or abandonment of the work, activity or
purpose for which the appropriation is authorized (this may happen, when,
take for instance, a project, activity or program [PAP] is determined to be
illegal or involves irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures or uses of government funds and properties);
(b) regarding employee compensation, vacancy of positions and leaves of
absence without pay; and (c) implementation of measures resulting in
improved systems and efficiencies, thus enabling agencies to meet and
deliver required or planned targets, programs, and services. When any of
these events happen, an appropriation item meaning, the statutory license
to spend becomes defunct and the funds allotted therefor become idle.
Envisioning this predicament, the Constitution allows augmentation as a
form of re-appropriation so that the various heads of government may, by
law, work with existing but defunct items of appropriation and practically
utilize the funds allotted therefor as savings in order to augment another
appropriation item which has been established to be deficient meaning, the
statutory license to spend is not enough to carry out or achieve the purposes
of the PAP to be implemented or under implementation. The requirement
that an item be deficient for it to be augmented may be gleaned from the
GAAs definition of augmentation which implies the existence x x x of
program, activity or project with an appropriation, which upon
implementation or subsequent evaluation of needed resources, is determined
to be deficient.5

3
4
5

See General Provisions of 2011 GAA, Section 60; 2012 GAA, Section 54; and 2013 GAA, Section 53.
See id.
See id.

Separate Concurring Opinion

G.R. Nos. 209287, et al.

As earlier stated, the term appropriation properly refers to the

statutory authority to spend. Although practically related, said term is
conceptually different from the term funds which refers to the tangible
public money that are allotted, disbursed, and spent. Appropriation is the
province of Congress. The President, in full control of the executive arm of
government, in turn, implements the legislative command in the form of
appropriation items pursuant to his constitutional mandate to faithfully
execute the laws.6 The Executive Department controls all phases of budget
execution;7 it acts according to and carries out the directive of Congress.
Hence, the constitutional mandate that [n]o money shall be paid out of the
Treasury except in pursuance of an appropriation made by law.8 It is
hornbook principle that when the appropriation law is passed, the role and
participation of Congress, except for the function of legislative oversight,
ends, and the Executives begins.9 Based on the foregoing, it is then clear
that it is the Executives job to deal with the actual allotment and
disbursement of public funds, whereas Congress job is to pass the statutory
license sanctioning the Executives courses of action.
When the Executive Department exercises its power of fiscal
management through, for instance, withdrawing unobligated allotments and
pooling them under Sections 38 and 39, Chapter 5, Book VI of the
Administrative Code of 198710 (Administrative Code), which respectively
state that:
SECTION 38. Suspension of Expenditure of Appropriations.Except as
otherwise provided in the General Appropriations Act and whenever in
his judgment the public interest so requires, the President, upon notice
to the head of office concerned, is authorized to suspend or otherwise
stop further expenditure of funds allotted for any agency, or any other
expenditure authorized in the General Appropriations Act, except for
personal services appropriations used for permanent officials and
employees.
SECTION 39. Authority to Use Savings in Appropriations to Cover
Deficits.Except as otherwise provided in the General Appropriations
Act, any savings in the regular appropriations authorized in the General
Appropriations Act for programs and projects of any department, office or
agency, may, with the approval of the President, be used to cover a deficit
in any other item of the regular appropriations: Provided, that the creation
of new positions or increase of salaries shall not be allowed to be funded
from budgetary savings except when specifically authorized by law:
6
7

8
9

10

See CONSTITUTION, Art. VII, Sec. 17.

3. Budget Execution. Tasked on the Executive, the third phase of the budget process covers the
various operational aspects of budgeting. The establishment of obligation authority ceilings, the
evaluation of work and financial plans for individual activities, the continuing review of government
fiscal position, the regulation of funds releases, the implementation of cash payment schedules, and
other related activities comprise this phase of the budget cycle. (Guingona, Jr. v. Carague, 273 Phil.
443, 461 [1991].)
CONSTITUTION, Art. VI, Sec. 29(1).
See Belgica v. Executive Secretary, G.R. No. 208566, G.R. No. 208493, and G.R. No.
209251, November 19, 2013.
Executive Order No. 292 (dated July 25, 1987).

Separate Concurring Opinion

G.R. Nos. 209287, et al.

Provided, further, that whenever authorized positions are transferred from

one program or project to another within the same department, office or
agency, the corresponding amounts appropriated for personal services are
also deemed transferred, without, however increasing the total outlay for
personal services of the department, office or agency concerned.
(Emphases supplied)

the President acts within his sphere of authority for he is merely managing
the execution of the budget taking into account existing fiscal deficits as
well as the circumstances that occur during actual PAP implementation (the
matter of fiscal deficits and implementation circumstances will be
expounded on in the succeeding discussion). However, he must always
observe and comply with existing constitutional and statutory limitations
when doing so that is, his directives in such respect should not authorize or
allow expenditures for an un-appropriated purpose nor sanction
overspending or the modification of the purpose of the appropriation item, or
even the suspension or stoppage of any expenditure without satisfying the
public interest requirement, else he would be substituting his will over that
of Congress and thereby violate the separation of powers principle, not to
mention, act against his mandate to faithfully execute the laws.
An appropriation items statutory value is a threshold limit to spend.
Meaning, the Executive can allot, disburse, and/or spend x amount of money
for x project for as long as the allotment, disbursement or expenditure is
within the value limit and only for the project provided in the appropriation
item. When the Executive implements an appropriation item, it is not always
the case that it automatically and completely allots, disburses, and spends the
specified amount of public funds to the full extent of that statutory limit.
There are two reasons for this: first, the usual existence of fiscal deficits;
and, second, the present circumstances surrounding the implementation of
the PAP for which the appropriation item authorizes the Executives
allotment, disbursement, and expenditure of public funds. Fiscal deficits
connote that not all appropriation items are automatically matched with
corresponding available funding. The circumstances of implementation
determine whether actual allotments, disbursements, and expenditures would
be needed to be made either immediately or at a later time (in case of
suspension), or not at all (in case of stoppage). Being part of budget
execution, the President, after the GAA is passed, deals with these two
realities by exercising his discretion of fiscal management which must
always be consistent with his constitutional mandate to faithfully execute the
laws. In the execution of the budget, he is guided by Section 3, Chapter 2,
Book VI of the Administrative Code which states:
SECTION 3. Declaration of Policy.It is hereby declared the policy of
the State to formulate and implement a National Budget that is an
instrument of national development, reflective of national objectives,
strategies and plans. The budget shall be supportive of and consistent with
the socio-economic development plan and shall be oriented towards the
achievement of explicit objectives and expected results, to ensure that

Separate Concurring Opinion

G.R. Nos. 209287, et al.

funds are utilized and operations are conducted effectively, economically

and efficiently. The national budget shall be formulated within the context
of a regionalized government structure and of the totality of revenues and
other receipts, expenditures and borrowings of all levels of government
and of government-owned or controlled corporations. The budget shall
likewise be prepared within the context of the national long-term plan and
of a long-term budget program.

When conducting fiscal management through suspending and

realigning expenditures under Section 38 supra, the President is not
technically augmenting according to Section 25(5) supra since he is not
changing the legislative parameters of the appropriation items (through
decreasing and increasing their statutory values). This is because, despite the
suspension of expenditures and their realignment (which are matters that
connote temporariness), the legislative parameters of the appropriation items
still remain the same; hence, no savings are generated nor are savings
needed. On the contrary, when he permanently stops expenditures under
Section 38 supra in the interest of the public, he, in relation to the first GAA
parameter on completion, final discontinuance and abandonment, generates
savings. The permanent stoppage of expenditures may then be treated as a
precursor act for either: (a) augmentation, when the statutory value of the
target appropriation item resultantly increases (in this case, savings are used
under Section 39 supra in relation to Section 25[5] supra to address a
deficiency in the appropriation item itself, and not only the funds allocated
therefor) ; or (b) for simple utilization, when the statutory value of the target
appropriation item is not increased and the PAP covered by the said item
only needs sufficient funding (in this case, savings are used under Section 39
supra only to address a fiscal deficit that is, the actual funds allocated for
the item to be implemented or under implementation were initially
inadequate, which is why the funds allocated to the defunct item [now, as
savings] would be utilized for the former). Notably, the budget deliberations
prior to the GAAs passage only account for projected revenues, and, hence,
do not reflect the governments actual financial position throughout the
course of the year. This is why when the public interest so requires
taking cue, for instance, from the realities of fiscal deficits and
implementation circumstances the President, under the authority of Section
38 supra, is given the power to suspend/stop expenditures which, to stress a
previous crucial point, must always be exercised consistent with his
constitutional mandate to faithfully execute the laws. Any arbitrary or
capricious exercise of the same will effectively negate Congress power of
control over the purse and, hence, can never be warranted.
When the President approves the wholesale withdrawal of unobligated
allotments by invoking the blanket authority of Section 38 supra vis--vis
the general policy impetus to ramp up government spending, without any
discernible explanation behind a particular PAP expenditures suspension
or stoppage, or any clarification as to whether the funds withdrawn then
pooled would be used either for realignment or only to cover a fiscal deficit,

Separate Concurring Opinion

G.R. Nos. 209287, et al.

or for augmentation (in this latter case, necessitating therefor the

determination of whether said funds are savings or not), a constitutional
conundrum arises. What results is a pooling of funds, from which a
multitude of executive options is opened. Under its broad context and the
governments presentment thereof, the observation I make is that the DAP
actually constitutes an amalgam of executive actions and/or practices
whereby augmentations may be undertaken, and/or funds realigned or
utilized to address fiscal deficits. Thus, with this in mind, I concur with the
ponencias limited conclusion that the withdrawal of unobligated allotments
not considered as savings for the purposes of augmentation, or, despite the
funds being considered as savings, the augmentation of items cross-border or
the funding of PAPs without an existing appropriation cover are
unconstitutional acts and/or practices taken under the DAP. I also maintain a
similar position with respect to the ponencias pronouncement on the
Unprogrammed Fund considering the absence of any proof that the general
or exceptive conditions11 for its use had been duly complied with.
Ultimately, notwithstanding any confusion as to the DAPs actual workings
or the laudable intentions behind the same, the one guiding principle to
which the Executive should be respectfully minded is that no policy or
program of government can be adopted as an avenue to wrest control of the
power of the purse from Congress, for to do so would amount to a violation
of the provisions on appropriation and augmentation as well as an aberration
of the faithful execution clause engraved and enshrined in our Constitution.
ACCORDINGLY, I concur with the ponencia that the following
acts and/or practices taken under the Disbursement Acceleration Program,
implemented through National Budget Circular No. 541 and other related
executive issuances, are UNCONSTITUTIONAL:
11

Special Provisions, Item 1 of 2011 GAA and 2012 GAA respectively state:
1. Release of Fund. The amounts authorized herein shall be released only when the
revenue collections exceed the original revenue targets submitted by the President of the
Philippines to Congress pursuant to Section 22, Article VII of the Constitution, including
savings generated from programmed appropriations for the year: PROVIDED, That
collections arising from sources not considered in the aforesaid original revenue targets
may be used to cover releases from appropriations in this Fund: PROVIDED,
FURTHER, That in case of newly approved loans for foreign-assisted projects, the
existence of a perfected loan agreement for the purpose shall be sufficient basis for the
issuance of a SARO covering the loan proceeds: PROVIDED, FURTHERMORE, That if
there are savings generated from the programmed appropriations for the first two quarters
of the year, the DBM may, subject to the approval of the President, release the pertinent
appropriations under the Unprogrammed Fund corresponding to only fifty percent (50%)
of the said savings net of revenue shortfall: PROVIDED FINALLY, That the release of
the balance of the total savings from programmed appropriations for the tear shall be
subject to fiscal programming and approval of the president.
1. Release of Fund. The amounts authorized herein shall be released only when the
revenue collections exceed the original revenue targets submitted by the President of the
Philippines to Congress pursuant to Section 22, Article VII of the Constitution, including
savings generated from programmed appropriations for the year: PROVIDED, That
collections arising from sources not considered in the aforesaid original revenue targets
may be used to cover releases from appropriations in this Fund: PROVIDED,
FURTHER, That in case of newly approved loans for foreign-assisted projects, the
existence of a perfected loan agreement for the purpose shall be sufficient basis for the
issuance of a SARO covering the loan proceeds.

Separate Concurring Opinion

G.R. Nos. 209287, etal.

(a)
the withdrawal of unobligated allotments fr9m the
implementing agencies not considered as savings for the purposes of
augmentation, the transfer of the savings of the Executive to augment
appropriations of other offices outside the Executive, and the augmentation
of items without any existing appropriation covers to the extent that said acts
and/or practices violated Section 25( 5) of the 1987 Philippine Constitution;
and

( b)
the use of the Unprogrammed Fund despite the absence of any
proof that the general condition for its use under the relevant GAAs, i.e.,
revenue collections were in excess of the original revenue targets, was
complied with, and without any justification tpat the exceptive conditions for
such use did concur.

~E~ERNABE

ESTELA
Associate Justice

..